Police and rescue services near the office of Charlie Hebdo. Photo: AFP

Witnesses spoke of sustained gunfire at the office as the attackers opened fire with assault rifles before escaping.

President Francois Hollande said there was no doubt it had been a terrorist attack "of exceptional barbarity".

A major police operation has been launched in the Paris area to catch the attackers.

Charlie's latest tweet was a cartoon of the Islamic State militant group leader, Abu Bakr al-Baghdadi.

The satirical weekly has courted controversy in the past with its irreverent take on news and current affairs.

The magazine was fire-bombed in November 2011 a day after it carried a caricature of the Prophet Muhammad.

People had been "murdered in a cowardly manner", President Hollande told reporters at the scene. "We are threatened because we are a country of liberty," he added, appealing for national unity.

UK Prime Minister David Cameron said in a tweet: "The murders in Paris are sickening. We stand with the French people in the fight against terror and defending the freedom of the press."

'Black-hooded men'

Two of those killed are police officers, France's AFP news agency reports, and five of those wounded are critically injured.

An eyewitness, Benoit Bringer, told French TV channel Itele: "Two black-hooded men entered the building with Kalashnikovs.

"A few minutes later we heard lots of shots."

The men were then seen fleeing the building.

"It's carnage," French police official Luc Poignant told another French channel, BFMTV.

Police have warned French media to be on alert and pay attention to security following the attack.